Prospective home buyers often place contingency clauses in a real estate contract when making a purchase offer. In a competitive real estate market, however, sellers may be less inclined to wait the number of weeks necessary for the fulfillment of the contingencies. To produce a more attractive offer, buyers may be able to reduce the time required for contingency completion.
Once a buyer has signed a purchase offer and deposited the accompanying earnest money, a legally binding contract is in effect. To avoid the loss of earnest money, the buyer must either close the deal or discover a condition described in a contingency clause. If a seller is also receiving competing offers, you can shorten your own estimate of the time required between your offer and the closing.
Before entering into a real estate contract, go ahead and apply for a mortgage loan ahead of time. Even though the sale may still be contingent on the completion of financing, the earlier efforts will hasten the fulfillment of the financing contingency. The actual funding of the mortgage may be contingent on an appraisal and a title search.
Because of the additional cost involved, you may prefer to have an appraisal performed after the purchase offer is accepted by the seller. In addition to an appraisal, a mortgage lender is likely to require a title search before releasing the funds. Your purchase offer should include a clause allowing you to rescind the offer if an unforeseen property encroachment is discovered.
A house that initially appears sound may have hidden problems such as foundation cracks or a leaky roof. A structural inspection requires additional cost, so you might prefer to have a professional inspection conducted after the purchase offer is signed. If a major problem is discovered during the inspection, you can then renegotiate the contract or rescind your offer.
Likelihood of Lead Paint
Before including a contingency clause concerning lead-based paint, consider the age of the home you are interested in. Federal regulations banned the use of lead-based paint by consumers in 1978. Sales of homes constructed in 1978 or later are not subject to the disclosure requirements concerning lead-based paint.
Unless you are considering a property in a slow real estate market, sellers are unlike to accept an offer contingent on the sale of your current home. However, a seller whose property has been on the market for an extended period of time is more likely to be amenable to contract contingencies in general.